MUFG Euro To Pound Forecast: EUR/GBP To Trade Sideways With Upside Bias - Exchange Rates Org UK

What the desk is arguing

MUFG posits that the EUR/GBP will trade sideways but with an underlying bullish sentiment towards the euro. The firm suggests that this trend reflects ongoing economic stability in the Eurozone compared to the UK, where uncertainties persist.

Supporting this view, MUFG highlights the potential for positive economic data from the Eurozone to bolster the euro's position against the pound. Factors such as divergence in monetary policy and economic recovery trajectories are likely to contribute to this upward bias in the currency pair.

Where it sits in our coverage

In our current coverage, the consensus target for EUR/GBP stands at 1.075, within a trading range of 1.04 to 1.12. This aligns closely with MUFG's perspective of a sideways trend with potential upward movement, suggesting that the market is factoring in a moderate outlook for the euro versus the pound.

Specifically, our tracked targets include: - Barclays: 1.08 (Dec-26) - JPMorgan: 1.10 (Dec-26) - Goldman Sachs: 1.06 (Dec-26)

How other firms see it

The consensus view appears to support MUFG's outlook with a notable number of firms positioned similarly. For example, JPMorgan predicts a target of 1.10 for the EUR/GBP, aligning with MUFG's bullish perspective.

Conversely, a divergent stance is taken by several firms that foresee potential downside risks. Noteworthy is BofA, which projects a more cautious target of 1.04, indicating apprehensions about the UK's economic outlook versus the Eurozone's recovery narrative.